Insurance Law Monthly

The consequences of a breach of a claims condition depend upon the classification of that condition either as a condition precedent (no recovery) or a bare condition (recovery, but subject to damages for any loss suffered by the insurers by reason of the breach. In Milton Keynes Borough Council v Nulty and Ors [2011] EWHC 2847 (TCC) Edwards-Stuart J held that liability insurers had, by reason of a late claim under a condition which was not expressed to be a condition precedent, suffered the loss of a chance to prove that their assured had not been negligent, and on that basis the insurers were entitled to deduct 15% from the sum due under the policy.

In Jones v Environcom Ltd and Anr [2011] EWCA Civ 1152, the Court of Appeal had to consider an appeal by an insured who sought to argue that, but for an insurance broker’s negligence in arranging cover, a fire which had caused significant loss to the insured would not have happened, and that, therefore, the insured was entitled to damages from the broker. The case is considered by Tom Asquith of 4 New Square.

The Financial Services and Markets Act 2000 requires persons carrying on insurance business in the UK to be authorised to do so by the Financial Services Authority. General (non-life) business is divided into 18 classes, as set out in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 SI 2001/3544, and authorisation is required if the business falls into any of the relevant classes. The question in Digital Satellite Warranty Cover Ltd v Financial Services Authority [2011] EWCA Civ 1413 was whether the applicant company was carrying on insurance business of one or more of the specified classes without authorisation. At first instance Warren J ruled that this was the case and that it was appropriate to grant a winding up order to the FSA on that basis. This was an appeal against that decision.

In Liberty Insurance (PTE) Ltd v Argo Systems FZE [2011] EWCA Civ 1572, insurers sought to overturn a finding at first instance that they had waived a breach of warranty. If they lost on that issue, then insurers claimed to be entitled to recover damages for misrepresentation. The Court of Appeal’s decision is considered by Katie Powell of 4 New Square.